The Mintec benchmark price for packing potatoes in the UK declined by 5% month-on-month (m-o-m), to GBP 190/MT on the week of 23 November. The price of potatoes has gradually declined since the start of harvest, as the main crop harvest was in full progress and an increasing volume of the crop came on to the market.
Despite the recent decline in prices, they remain up 31% year-on-year (y-o-y). Potato growers continue to face higher y-o-y production costs, largely for energy, fertiliser and transportation. The cost of storing potatoes rose significantly compared to 2021, due to higher electricity costs, and this is a key price driver at this time of year. Market participants expect some growers to sell off supplies earlier in the season due to higher drying and storage costs, driving prices down in the short term, and leading to tighter stocks later in the season.
So far this season, demand for free-buy packing supplies has been muted. Many supermarkets contracted a higher proportion of their requirements for the 2022/23 season, to limit exposure to volatile prices. Therefore, significant driving factors, including higher input costs, have not been fully reflected in higher retail pricing. Next season, market participants expect contract prices to rise, to account for the increased input costs, which could result in higher retail prices when the 2023 crop is harvested.